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Mortgage Rates Mixed

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Long-term fixed rates moved lower, while short-term fixed rates and hybrid-adjustable rates moved higher. Rates remain volatile ahead of a key economic report.

At 4.51 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday, 30-year fixed rates were 2 basis points better than a week ago.

Compared to the same week last year, interest rates on 30-year home loans have shot up 111 BPS.

“Mortgage rates were little changed amid a week of light economic reports,” Freddie Mac Chief Economist Frank Nothaft was quoted as saying in the survey.

As things sit, Treasury market activity suggests no changes are ahead for fixed rates.

Data from the Treasury Department indicate that the yield on the 10-year Treasury note — a benchmark for 30-year mortgage rates — averaged 2.98 percent during the period when Freddie conducted this week’s survey. The 10-year yield closed Thursday at 2.97 percent.

However, the degree of volatility is high over the next week thanks to tomorrow’s employment report. If more than 200,000 jobs were added in December, then rates could be pushed higher. But an increase of less than 175,000 jobs might pull down rates.

Half of the panelists surveyed by Bankrate.com for the week Jan. 9 to Jan. 15 agreed with Mortgage Daily’s forecast that rates are unlikely to move much over the next week. But the other half predicted an increase of at least 3 BPS.

The spread between jumbo mortgages and conforming loans widened to 28 BPS in the U.S. Mortgage Market Index from LoanSifter and Mortgage Daily for the week ended Jan. 3 from 21 BPS in the previous report.

Freddie reported average 15-year fixed rates at 3.56 percent, a single basis point higher than in the previous report. The spread between 15- and 30-year mortgages was trimmed to 95 BPS from 98 BPS in the week ended Jan. 2, 2014.

Five-year, Treasury-indexed, hybrid, adjustable-rate mortgages averaged 3.15 percent in Freddie’s report, 10 BPS worse than a week earlier.

No change from last week left one-year Treasury-indexed ARMs at 2.56 percent in Freddie’s survey. One-year ARMs averaged 2.60 percent in the week ended Jan. 10, 2013.

The yield on the one-year Treasury note, which is used as an index on one-year ARMs, was 0.13 percent today, the same as seven days ago, according to the Treasury Department data.

Another ARM index, the six-month London Interbank Offered Rate — or LIBOR — slipped to 0.34 percent Wednesday from 0.35 percent a week prior, according to Bankrate.com.

ARM share fell to 11.1 percent in the most recent Mortgage Market Index report from 16.7 percent a week earlier.

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